If there is a balance remaining in your account upon your death, it is transferred to an HCSP account for your spouse. If there is no spouse, then it's transferred to an HCSP account for your legal dependent(s). Reimbursements to a spouse or legal dependents are tax-free.
If you do not have a spouse or legal dependent, then the money is transferred to an HCSP account for your designated beneficiary. Reimbursements to a beneficiary are subject to federal and state income taxes.
If you do not have a spouse, legal dependent, or designated beneficiary, then the representative of your estate will be asked to name a beneficiary who is eligible to receive any remaining account balance.